A man saves a scorched flag from a home destroyed by the Lower North Fork Fire March 28, 2012 in Conifer, Colorado. They are part of the State Wildland Inmate Fire team. The fire which has burned 4,500 acres has claimed two lives and over 20 homes. (Photo by Chris Schneider/Getty Images)

DENVER (AP/CBS4) – Victims of last month’s deadly wildfire southwest of Denver gave emotional accounts at the state Capitol on Monday before lawmakers gave initial approval to a measure aimed at compensating residents.

But state leaders warned it sets an unfair precedent for the state on how damage claims against it are handled, even if the intent is a noble one. Some lawmakers argued it may block residents from seeking relief in the courts. Democrats also questioned whether it was wise to have lawmakers be in charge of deciding damage claims during an election year.

Three people died and two dozen homes were damaged from the fire that grew out of a state prescribed burn near a mountain community. The fire, known as the Lower North Fork Fire, caused at least $11 million in property damage. Democratic Gov. John Hickenlooper’s office said all but possibly two of the homes affected are insured.

Republicans sponsoring a bill to create a commission to pay victims’ claims argue the state should pay because its actions caused the fire, even if investigators determine there was no criminal wrongdoing.

A House committee approved the bill Monday on an 8-3 vote. The bill still needs to be considered by the full House.

“I said goodbye to parents by kissing their 20-gauge steel casket,” Sam Lucas said. His parents, Sam Lucas, 77, and Linda Lucas, 76, were among the dead. “I’m just trying to relay to you that the people up there on the mountain, they were my parents and I will miss them.”

Scott Appel, whose wife Ann Appel died in the fire, told lawmakers, “I don’t understand how a legislator can oppose this bill on moral grounds.”

“Colorado has no right to inflict damage on its citizens and advocate all responsibility by some legislative action,” Appel also said.

Deputy Attorney General David Blake, speaking on behalf of Attorney General John Suthers, a Republican, told lawmakers he was “humbled” by the victims’ testimony, but his office opposes the bill because it would set an unfair precedent. Blake also said he was concerned the bill did not specifically say how the state would pay for the claims.

“To adjudicate claims without a funding source will potentially raise expectations that may never be met,” he said.

For decades, the state has had a $600,000 liability cap under Colorado’s Governmental Immunity Act. Suthers and Hickenlooper’s office argue that the cap protects the state from paying unlimited amounts in claims. Blake said that “while perceived as harsh to many, application of the act is impartial to all.”

Republican Rep. Cheri Gerou, whose district includes the Lower North Fork Fire, said the bill is necessary “so that people of Colorado don’t worry that the state of Colorado won’t listen to them.” Gerou is also a member of the powerful budget-writing Joint Budget Committee, which would play a big role in handling damage claims if the bill becomes law.

“These individuals have not been heard at all in any of the investigations, and I believe they have a story to tell, and it’s a story that I believe the state wants and should listen to,” Gerou told CBS4.

The bill would create a commission, including some members of the Legislature, the state treasurer and the executive director of the Colorado Department of Public Safety. The commission would hold hearings on the events surrounding the fire and issue recommendations to lawmakers on how to pay victims.

Democrats opposing the bill said the proposal forces fire victims to give up their right to pursue remedy in court if they pursue a claim through the commission. Democrats also said it puts the onus on lawmakers to handle damage claims while running for re-election.

“The Legislature, generally speaking, is not involved in these types of determinations for a good reason,” Democratic Rep. Dan Pabon said. “They are too far involved in the electoral politics of the day and that is my main concern.”

Gerou said it shouldn’t be about politics.

“Some have said that this is a partisan bill. Losing your home, losing the ones you love is not a partisan issue,” she said.